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The directors of a Markham ratepayers group say legal threats from the private promoter of the city’s proposed NHL-size arena concerning possible harm to his “reputation” won’t stop them from questioning the deal.

“We in Markham will not be intimidated when all we are doing is telling the truth,” Karen Rea, a director of the Markham Citizens Coalition for Responsible Government, said Tuesday.

Her comment follows a notice from a lawyer for Graeme Roustan, president of GTA Sports and Entertainment, who said “personal attacks” to his reputation on the coalition’s website or in a public meeting “are not appropriate.”

The notice from heavyweight Bay Street firm McCarthy Tétrault came hours before the start of a two-day special meeting where council heard residents’ views on whether the city should cancel a public-private financial arrangement to fund a $325-million arena and end negotiations for the project. More than 1,200 people attended the two meetings but council had not yet made a decision late Tuesday.

“Please be aware that public statements by the MCCRG or its directors that do harm to Mr. Roustan’s reputation, whether or not they are a repetition of newspaper reports or other sources, may constitute libel or slander and give rise to serious legal consequences,” the firm said in the notice.

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“We would ask that on your website and in any public comments by your directors, the MCCRG adhere to standard practice and not pose open-ended questions or make statements based on misinformation that are harmful to Mr. Roustan’s reputation.”

Rea, who is also president of the Markham Village City Ratepayers Association and an arena project opponent, said the notice speaks volumes about Roustan’s character, integrity and his business tactics.

“Threatening residents where you want to do business is not a smart thing to do,” she added.

The association has urged the city not to conduct business with Roustan, pointing to U.S. court judgments against him including civil fraud, as well as a claim that he was a “finalist” to buy the Montreal Canadiens in 2010.

Quoting sources familiar with the sale, The Star reported last year that Roustan never made a serious financial bid for the famed hockey club. (In support of his claim, Roustan sent the Star a picture from a French television program with two “confirmed” bidders for the team and two “non-confirmed” suitors including himself.)

Roustan has also led a number of business ventures that went nowhere and left a trail of unhappy investors behind him in several U.S. cities.

Coalition director Marilyn Ginsberg, a retired human rights lawyer, said her group has no interest in attacking Roustan as a person but when he is seeking millions of dollars in public money, people should be able to question his credentials.

“When he is asking us, as taxpayers, to bless the city’s plan to borrow $162.5 million to help build an arena for Mr. Roustan to operate, we have every right to investigate and discuss his track record as a businessman,” Ginsberg added.

Meanwhile, David Jordan, president of the Thornhill Conservation Ratepayers Associations, expressed shock at Roustan’s notice to the coalition. “It is a testament to his character and the kind of partner he would be if business became difficult within the (arena) GTA Centre,” said Jordan, who also opposes the project.

At the council meeting on Monday night, Roustan, former part-time chairman of Bauer Performance Sports, showed a picture of himself as a young boy and stressed that he wants a bigger and better facility than the one envisioned in an earlier draft plan of the project.

“It will happen in Markham,” he added.

At the meeting Tuesday, more residents raised concerns about the financial risk to the city without assurances of an NHL franchise. The NHL has already said it has no plans to locate a second franchise in the Toronto area.

However, some residents said an arena will be a “magnet” for the city’s economic growth and increasing property values.

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